Shenwan Hongyuan Group Co., Ltd.'s chief strategist Wang Sheng recently stated that the current bull market is far from over, supported by solid fundamentals and transformative developments in the tech sector, which underpin this technology-driven rally.
Regarding artificial intelligence (AI), Wang emphasized that regardless of potential bubbles, advancing AI is imperative due to its role in global competition among major powers. He believes that once AI reaches a certain maturity, the focus will shift to establishing sustainable business models, particularly resolving monetization challenges on the application front.
Wang highlighted China's "alpha opportunities" in real-economy development compared to the U.S., asserting that China holds an absolute advantage in the AI application phase. Dismissing skepticism about China’s ability to produce breakthrough applications by 2025, he noted that structural bright spots have already emerged in China’s AI industry, and more time—though not excessively long—is needed for maturation.
Addressing market concerns about an AI bubble, Wang argued that widespread anxiety likely indicates no true bubble yet exists. He acknowledged that the tech rally isn’t a "broad-based bull market," with 2025 inflows dominated by high-net-worth individuals via private banking channels and quantitative private funds, while foreign passive capital inflows outweigh slowing active outflows. However, he projected increased foreign investment in 2026 as valuation dynamics shift.
Foreign investors, now keenly focused on China’s tech sector amid the U.S.-China AI race, have revised their perception of China. Despite global under-allocation to Chinese assets, Wang expects foreign inflows to trigger systemic revaluation for Hong Kong and A-share market leaders, especially by mid-2025 as improving fundamentals—fixed-asset growth inflection, PPI recovery, and stabilizing property prices—bolster confidence in the bull market’s longevity.
On currencies, Wang anticipates a steady long-term appreciation of the renminbi, with the U.S. dollar facing medium-term pressure. However, the dollar’s strength against peers like the euro and yen may persist if the U.S. outperforms other developed economies. He underscored gold’s enduring value amid global monetary restructuring, cautioning against volatility as hedge funds increase leveraged exposure.
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